Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal

Kristin Kiesel and Sofia Villas-Boas ()
Additional contact information
Kristin Kiesel: University of California, Berkeley

No 1024, Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: This paper investigates consumer reactions to changes in information provision regarding organic production. Quantitative analyses focus on the actual implementation of mandatory labeling guidelines under the National Organic Program. The unique nature of the fluid milk market in combination with these regulatory changes allows us to place a value on information sets under different labeling regimes. Hedonic price functions provide an initial reference point for analyses of individual responses. A random utility discrete choice model serves as the primary econometric specification and allows consideration of consumer preference heterogeneity along observable household demographics. Our results indicate that the USDA organic seal increases the probability of purchasing organic milk. An initial hedonic price function approach, as well as simulations within the discrete choice framework, suggests that consumers value the change in labeling regulations with regard to organic production. Our results further suggest that consumers substitute away from milk carrying the rBGH-free label. This may indicate that consumers pay less attention to these labels in the time period investigated compared to results found in studies that use earlier time periods.

Keywords: consumers' preferences; food labeling; milk; natural foods, (search for similar items in EconPapers)
Date: 2007-03-15
Note: oai:cdlib1:are_ucb-1125
View list of references View citations in EconPapers

Downloads: (external link)
http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1125&context=are_ucb (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cdl:agrebk:1024

Access Statistics for this paper

More papers in Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().